We all worry about the potential of fraud, embezzlement, and other risks as business owners.

Nearly as quickly as cyber-security companies release new goods and services, cybercriminals modify their techniques. It is essentially impossible to provide defence against every kind of assault.

To minimise this loss, fraud prevention and detection measures must be used. Every organisation should have a plan in place because it is much simpler to avoid fraud than it is to recoup your losses once it has been committed.

1. Set up a reporting system

All workers are impacted by awareness. The fraud risk policy should be understood by every employee of the company, including the different types of fraud and the penalties attached to them. Those who intend to conduct fraud will be aware that management is looking, and perhaps this will prevent them. The possibility of theft or fraud will also be made known to honest workers who are not enticed to steal. While company employees tend to provide the majority of tips, other significant sources include clients, suppliers, rival businesses, and the fraudster’s friends and acquaintances. Consider establishing an anonymous reporting mechanism because many employees are reluctant to report occurrences to their employers. Employees can report fraudulent conduct by calling a tip hotline or using a website that protects their identity.

2. Separate the accounting tasks.

Due to their small size, many small businesses only employ one person to perform all bookkeeping duties, including handling petty cash, paying invoices, processing client payments, and collecting client receivables. This makes it simple for fraud situations to go unreported. Businesses should have at least two people performing these tasks alternately, handle cash and accounting tasks in a completely separate manner, or outsource these tasks to an accounting services company.

3. Conduct Regular Book Audits.

Businesses should routinely audit their cash handling, refunds, returns of goods, inventory control, and accounting services.. Additionally, irregular non-scheduled audits from time to time might aid in the detection of fraud in crucial, high-risk company areas. An audit’s primary goal is to verify accuracy. An audit might therefore aid in identifying mistakes or potential chances of fraud  in your accounting records or procedures. Your financial statements may hold more credibility in the business world if they have been independently reviewed by an external auditor.

4. Run background investigations

Access to numerous significant records and documents may be granted to your staff. It’s crucial to check a candidate’s honesty and integrity before hiring them. In addition to conducting a criminal background check, you can also confirm a candidate’s employment history, education, references, and, if necessary for the job, their credit history. Under no circumstances would you want to jeopardise your company, thus you would hire a dependable employee.